<PAGE>

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-Q

           [ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 2001

                                       OR

          [    ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                      (Commission file number:  000-30931)

                            OPNET TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                   <C>                              <C>
        Delaware                                  7373                     52-1483235
(State or other jurisdiction of      (Primary Standard Industrial      (I.R.S. Employer
incorporation or organization)        Classification Code Number)      Identification No.)
</TABLE>

                              7255 Woodmont Avenue
                              Bethesda, MD  20814
                    (Address of principal executive office)

                                 (240) 497-3000
              (Registrant's telephone number, including area code)

  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.     Yes [X]     No [  ]

  At November 9, 2001, there were outstanding 18,993,132 shares of common stock
of the registrant.


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<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                      Page
                                                                                                                      ----
<S>             <C>                                                                                                   <C>
PART I.                                                FINANCIAL INFORMATION

Item 1.         Consolidated Financial Statements                                                                        3

                Consolidated Balance Sheets as of September 30 and March 31, 2001                                        3

                Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2001 and 2000     4

                Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2001 and 2000               5

                Notes to Consolidated Financial Statements                                                               6

Item 2.         Management's Discussion and Analysis of Financial Condition and Results of Operations                   10

Item 3.         Quantitative and Qualitative Disclosures About Market Risk                                              20

PART II.        OTHER INFORMATION

Item 1.         Legal Proceedings                                                                                       21

Item 2.         Changes in Securities and Use of Proceeds                                                               21

Item 3.         Defaults Upon Senior Securities                                                                         21

Item 4.         Submission of Matters to a Vote of Security Holders                                                     21

Item 5.         Other Information                                                                                       22

Item 6.         Exhibits and Reports on Form 8-K                                                                        22

                Signatures                                                                                              23

                Exhibit Index                                                                                           24
</TABLE>

                                       2
<PAGE>

                         PART I.  FINANCIAL INFORMATION

ITEM 1.  Consolidated Financial Statements

                            OPNET Technologies, Inc.
                          Consolidated Balance Sheets
                     (in thousands, except per share data)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                  September 30,       March 31,
                                                                       2001             2001
                                                                  ------------       ----------
<S>                                                              <C>                  <C>
                                   ASSETS
Current assets:
   Cash and cash equivalents                                           $59,257         $62,623
   Accounts receivable, net of $42 and $113 in allowance for
     doubtful accounts at September 30 and
     March 31, 2001, respectively                                        5,965           4,515
   Unbilled accounts receivable                                          2,070           1,406
   Refundable income taxes                                                  94             332
   Deferred income taxes                                                   420             546
   Prepaid expenses and other current assets                             2,045           2,486
                                                                       -------         -------
          Total current assets                                          69,851          71,908

Deferred income taxes                                                      141               -
Property and equipment, net                                              7,261           6,891
Investment in affiliate                                                    446               -
Intangible assets, net                                                   1,800           2,000
Goodwill and assembled workforce                                        10,921          10,704
Other assets:
   Deposits                                                                 44              75
   Loan to officer                                                           -             231
   Purchased software, net                                                 508             464
                                                                       -------         -------
          Total assets                                                 $90,972         $92,273
                                                                       =======         =======

                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                    $   829         $   514
   Accrued liabilities                                                   2,636           7,146
   Accrued income taxes                                                    213              93
   Deferred revenue                                                      7,454           7,681
                                                                       -------         -------
          Total current liabilities                                     11,132          15,434

Deferred rent                                                              226              59
Deferred revenue                                                           339             311
Deferred taxes                                                               -              15
                                                                       -------         -------
          Total liabilities                                             11,697          15,819
                                                                       -------         -------

Commitments and contingencies
Stockholders' equity:
   Preferred stock-par value $0.001; 5,000 shares authorized;
    160 designated as Series A, No shares issued and
    outstanding at September 30 and March 31, 2001                           -               -
   Common stock-par value $0.001; 100,000 authorized; 25,112 and
    24,901 shares issued at September 30 and March 31, 2001,
    respectively; 18,978 and 18,767 shares outstanding at
    September 30 and March 31, 2001, respectively                           25              25
   Additional paid-in capital                                           71,255          70,708
   Deferred compensation                                                  (135)           (180)
   Retained earnings                                                    12,236           9,999
   Accumulated other comprehensive (loss) income                            (6)              2
   Treasury stock - 6,134 shares at September 30 and
    March 31, 2001                                                      (4,100)         (4,100)
                                                                       -------         -------
          Total stockholders' equity                                    79,275          76,454
                                                                       -------         -------
           Total liabilities and stockholders' equity                  $90,972         $92,273
                                                                       =======         =======
</TABLE>

                See notes to consolidated financial statements.

                                       3
<PAGE>

                            OPNET Technologies, Inc.
                     Consolidated Statements of Operations
                                  (unaudited)


<TABLE>
<CAPTION>
                                      Three Months Ended                Six Months Ended
                                         September 30,                    September 30,
                                    -----------------------         ------------------------
<S>                                 <C>              <C>            <C>              <C>
                                      2001            2000            2001             2000
                                     ------          ------         -------          -------
Revenues:
  Software licenses                 $ 6,585           4,314         $13,115          $ 7,967
  Services                            4,690           3,456           9,290            6,237
                                     ------          ------         -------          -------
  Total revenues                     11,275           7,770          22,405           14,204
                                     ------          ------         -------          -------
Cost of revenues:
  Software licenses                     160             124             270              301
  Services                            1,440           1,127           2,959            2,114
                                     ------          ------         -------          -------
  Total cost of revenues              1,600           1,251           3,229            2,415
                                     ------          ------         -------          -------
Gross profit                          9,675           6,519          19,176           11,789
                                     ------          ------         -------          -------
Operating expenses:
  Research and development            3,298           1,946           6,452            3,628
  Sales and marketing                 4,154           3,282           8,323            5,997
  General and administrative          1,090             792           2,075            1,452
  Amortization of acquired
    technology                          112               -             212                -
                                     ------          ------         -------          -------
  Total operating expenses            8,654           6,020          17,062           11,077
                                     ------          ------         -------          -------
Income from operations                1,021             499           2,114              712
Interest and other income               517             677           1,168              813
                                     ------          ------         -------          -------
Income before provision
  for income taxes                    1,538           1,176           3,282            1,525
Provision for income taxes              476             435           1,045              560
                                     ------          ------         -------          -------
Net income                            1,062             741           2,237              965
Accretion of transaction
  costs on redeemable
  convertible preferred
  stock                                   -              (2)              -               (6)
                                     ------          ------         -------          -------
Net income applicable
  to common shares                  $ 1,062          $  739         $ 2,237          $   959
                                    =======          ======         =======          =======
Basic net income applicable
  per common share                  $  0.06          $ 0.05         $  0.12          $  0.06
                                    =======          ======         =======          =======
Diluted net income per
  common share                      $  0.05           $0.04         $  0.11          $  0.06
                                    =======          ======         =======          =======
Weighted average common
  shares outstanding (basic)         18,952          16,296          18,881           14,801
                                    =======          ======         =======          =======
Weighted average common
  shares outstanding (diluted)       19,861          18,042          20,025           16,333
                                    =======          ======         =======          =======
</TABLE>

                See notes to consolidated financial statements.

                                       4
<PAGE>

                            OPNET Technologies, Inc.
                     Consolidated Statements of Cash Flows
                                  (unaudited)


<TABLE>
<CAPTION>
                                                                                Six Months Ended
                                                                                  September 30,
                                                                        --------------------------------
                                                                         2001                     2000
                                                                        -------                 --------
                                                                               (in thousands)
<S>                                                                     <C>                     <C>
Cash flows from operating activities:
   Net income                                                           $ 2,237                 $   965
   Adjustments to reconcile net income to net cash (used in)
    provided by operating activities:
     Depreciation and amortization                                          985                     694
     Deferred income taxes                                                  (30)                    (92)
     Tax benefit from exercise  of nonqualified stock options                53                     198
     Expense related to employee stock options                               45                      48
     Equity loss from affiliate                                               3                       -
        Changes in assets and liabilities:
          Accounts receivable                                            (2,345)                   (305)
          Prepaid expenses and other current assets                         597                    (544)
          Loans to employees                                                231                       -
          Refundable  income taxes                                          238                     447
          Deposits                                                           31                    (196)
          Accounts payable                                                  315                      33
          Accrued liabilities                                            (2,478)                    683
          Accrued income taxes                                              120                       -
          Deferred revenue                                                 (199)                  1,396
          Deferred rent                                                     167                       2
                                                                        -------                 --------
            Net cash (used in) provided by operating activities             (30)                  3,329
                                                                        -------                 --------
 Cash flows from investing activities:
   Acquisition                                                           (1,156)                      -
   Investment in affiliate                                                 (461)                      -
   Purchase of software                                                    (123)                   (104)
   Purchase of property and equipment                                    (2,082)                 (1,067)
                                                                        -------                 --------
            Net cash used in investing activities                        (3,822)                 (1,171)
                                                                        -------                 --------
 Cash flows from financing activities:
   Proceeds from sale of common stock                                         -                  59,800
   Costs incurred for initial public offering                                 -                  (4,840)
   Proceeds from exercise of common stock options                           285                     218
   Proceeds from issuance of common stock
    under employee stock purchase plans                                     209                       -
                                                                        -------                 --------
            Net cash provided by financing activities                       494                  55,178
                                                                        -------                 --------

Effect of exchange rate changes on cash and cash equivalents                 (8)                      -
                                                                        -------                 --------
Net (decrease) increase in cash and cash equivalents                     (3,366)                 57,336

Cash and cash equivalents, beginning of period                           62,623                   8,765
                                                                        -------                 --------

Cash and cash equivalents, end of period                                $59,257                 $66,101
                                                                        =======                 =======

</TABLE>



                See notes to consolidated financial statements.

                                       5
<PAGE>

                            OPNET Technologies, Inc.
                   Notes to Consolidated Financial Statements
                                  (unaudited)

  1.  Basis of Presentation and Nature of Operations

  OPNET Technologies, Inc. ("OPNET", the "Company", "we" or "us") provides
intelligent network management software solutions that enable organizations to
optimize the performance and maximize the availability of communications
networks and networked applications.  The OPNET product suite combines
predictive modeling and a comprehensive understanding of networking technologies
to enable network professionals to more effectively design and deploy networks,
provision services, diagnose network and application performance problems,
predict the impact of network changes, and efficiently plan capital investments.
OPNET is headquartered in Bethesda, Maryland and has offices in Boston, Cary,
Dallas, Santa Clara, Paris, France and Oxford, United Kingdom.

  The accompanying consolidated financial statements include the results of
OPNET Technologies, Inc. and its wholly owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.
The interim financial statements included herein are unaudited and have been
prepared in accordance with generally accepted accounting principles ("GAAP")
and applicable rules and regulations of the Securities and Exchange Commission
(the "SEC") regarding interim financial reporting.  Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with GAAP have been condensed or omitted pursuant to such rules and
regulations. Accordingly, these interim financial statements should be read in
conjunction with the audited consolidated financial statements and accompanying
notes thereto contained in the Company's Annual Report on Form 10-K for the year
ended March 31, 2001, filed with the SEC.  The March 31, 2001 consolidated
balance sheet included herein was derived from the audited financial statements
as of that date, but does not include all disclosures including notes required
by generally accepted accounting principles.  In the opinion of management,
these interim financial statements reflect all adjustments of a normal and
recurring nature necessary to present fairly the Company's results for the
interim periods.  The preparation of financial statements in conformity with
GAAP requires management to make certain estimates and assumptions.  These
estimates and assumptions affect the reported amounts of assets and liabilities
as of the date of the financial statements, as well as the reported amount of
revenues and expenses during the reporting period.  Actual results could differ
from those estimates.  In addition, the Company's operating results for the
three and six months ended September 30, 2001 may not be indicative of the
operating results for the full fiscal year or any other future period.

  On March 30, 2001, OPNET Development Corp., a wholly owned subsidiary of the
Company, acquired substantially all of the assets and operations of the NetMaker
Division of Make Systems, Inc. ("NetMaker") using the purchase method of
accounting.  NetMaker offers a sophisticated suite of products that address the
operational and engineering needs of traditional and next-generation network
service providers.  The results of NetMaker's operations have been included in
the accompanying consolidated statements of operations from the date of
acquisition.


  2.  Credit Agreements

  In June 2000, the Company entered into a $5.0 million line of credit facility
with a commercial bank.  The line of credit allowed the Company to use the funds
for corporate borrowings and the issuance of letters of credit up to a maximum
of $5.0 million.  The Company used the facility to issue a letter of credit for
approximately $3.4 million to satisfy the security deposit requirements for its
new corporate office facilities lease.  The Company renewed the credit facility
for an additional year, and it will now expire in June 2002. Interest is payable
monthly, based on LIBOR plus the applicable margin ranging from 2% to 2.5% as
stated in the loan agreement.  The credit facility is collateralized by certain
assets of the Company and there are also certain financial ratios and conditions
that the Company must maintain under the terms of the loan agreement, as well as
certain covenants with which the Company must comply.  As of September 30, 2001,
the Company had no balance outstanding under its line of credit.


  3.  Stockholders' Equity

  During the three and six months ended September 30, 2001, the Company received
proceeds of approximately $73,000 and $285,000 and issued 86,862 and 191,406
shares of Common Stock, respectively, pursuant to employee exercises of stock
options.  During the six months ended September 30, 2001, employees purchased
19,111 shares of Common Stock under the 2000 Employee Stock Purchase Plan,
resulting in further proceeds to the Company of approximately $209,000.

                                       6
<PAGE>

  4.  Net Income Per Common Share

  In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 128, Earnings Per Share.
This statement requires dual presentation of basic and diluted earnings per
share on the face of the income statement.  In April 2001, the Emerging Issues
Task Force issued an interpretation, Topic No. D-95, "Effect of Participating
Convertible Securities on the Computation of Basic Earnings Per Share" which
stipulates that participating convertible securities should be included in the
computation of basic earnings per share.  The Company has restated basic
earnings per share for the three and six months ended September 30, 2000 in
accordance with this interpretation.  The effect on basic earnings per share was
a $0.01 reduction for the six months ended September 30, 2000.  Basic earnings
per share is to be computed by dividing net income available to common
shareholders by the weighted average number of common shares and participating
preferred shares outstanding for the period. Diluted earnings per share reflect,
the potential dilution that could occur if securities or other contracts to
issue common shares were exercised or converted into common shares.

<TABLE>
<CAPTION>
                                                              Three Months Ended                     Six Months Ended
                                                                  September 30,                        September 30,
                                                             -----------------------             -----------------------
                                                               2001            2000                2001            2000
                                                             -------         -------             -------         -------
<S>                                                       <C>           <C>                     <C>             <C>
Income (Numerator):                                                        (in thousands, except per share data)
     Net income applicable to common shares                  $ 1,062         $   739             $ 2,237        $   959
     Plus:
     Accretion of transaction costs on redeemable                  -               2                   -              6
     convertible preferred stock
                                                             -------         -------             -------        -------
     Net income (basic and diluted)                          $ 1,062         $   741             $ 2,237        $   965
                                                             =======         =======             =======        =======
Shares (Denominator):
     Weighted average shares outstanding                      18,952          15,399              18,881         13,270
     Plus:
       Participating redeemable convertible
         preferred stock                                          -              897                   -          1,531
                                                             -------         -------             -------        -------
     Weighted average common shares outstanding (basic)       18,952          16,296              18,881         14,801

     Plus:
       Effect of other dilutive securities - options             909           1,746               1,144          1,532
                                                             -------         -------             -------        -------
     Weighted average shares outstanding (diluted)            19,861          18,042              20,025         16,333
                                                             =======         =======             =======        =======

Net income per common share:
     Basic net income per common share                       $  0.06         $  0.05             $  0.12        $  0.06
     Diluted net income per common share                        0.05            0.04                0.11           0.06
</TABLE>


  5.  Business Segment and Geographic Area Information

  The Company operates in one industry segment, the development and sale of
computer software programs and related services.  For the six months ended
September 30, 2001, there were no sales to any customers within a single country
except for the United States where such sales accounted for 10% or more of total
revenues.  Substantially all assets were held in the United States for the
quarter ended September 30, 2001 and the fiscal year ended March 31, 2001.

                                       7
<PAGE>

6.  Supplemental Cash Flow Information

<TABLE>
<CAPTION>
                                                                     Six Months Ended
                                                                       September 30,
                                                               -----------------------------
                                                                 2001                  2000
                                                               -------                ------
<S>                                                             <C>                   <C>
Supplemental disclosure of cash flow information:                      (in thousands)
    Cash paid during the year for income taxes                   $ 651                $    9

Supplemental disclosure of non cash activities:
    Accrued tenant allowance                                     $ 359                $    -
    Post-closing acquisition adjustments                         $ 217                $    -
    Conversion of preferred stock                                $   -                $6,954
    Accrued offering costs                                       $   -                $  799
    Accretion on preferred stock                                 $   -                $    6
</TABLE>

7.    Comprehensive Income

  In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income.
This statement requires the Company to report and display certain information
related to comprehensive income and its components.  Comprehensive income
includes net income and foreign currency translation adjustments.  For the three
and six months ended September 30, 2001, comprehensive income for the Company
was $1.1 million and $2.2 million, and included accumulated foreign currency
translation losses of approximately $2,000 and $8,000, respectively.


8.  Investment in Affiliate

  The Company applies the equity method of accounting for investments in
business entities in which the Company does not have significant control but
has an ownership interest between 20% and 50%.  The Company consolidates all
majority-owned and controlled subsidiaries.

  In August 2001, the Company entered into an agreement with Comsof N.V., a
Belgium company and the owner of WDM NetDesign B.V.B.A. ("WDM NetDesign"),
through which the companies will collaborate on the development of optical
network planning products. Under the agreement, OPNET acquired a 20% interest in
WDM NetDesign for consideration of $399,000 and purchased an option for
consideration of $1,000 to acquire all remaining shares of WDM NetDesign. If the
Company exercises the option, OPNET will acquire the remaining shares for a
total consideration of approximately $1.3 million to be paid in cash or a
combination of cash and OPNET common stock. The option expires in December 2001.

  The Company accounted for the investment in WDM NetDesign using the equity
method.  Included in the carrying amount of the WDM NetDesign investment is
assembled workforce of $68,000 and acquired technology of approximately $352,000
that is being amortized on a straight-line basis over a period of five years.
The purchase price allocation is preliminary and subject to adjustment.

  The Company's share in WDM NetDesign's losses for the three and six months
ended September 30, 2001 was $3,000.


9.  New Accounting Pronouncements

  In July 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS
No. 142, Goodwill and Other Intangible Assets.  SFAS No. 141 requires business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method of accounting, and that certain acquired intangible assets in a
business combination be separately identified and recognized as assets apart
from goodwill.  SFAS No. 142 requires that goodwill and certain other intangible
assets will no longer be amortized and instead will be subject to periodic
evaluation for impairment.  In addition, the Statement includes provisions for
the reclassification of certain existing recognized intangibles as goodwill.

                                       8
<PAGE>

  The Company has elected for early adoption of SFAS Nos. 141 and 142, which is
permitted for entities with fiscal years beginning after March 15, 2001.  As a
result, the Company has not amortized approximately $10.0 million of goodwill
and $1.0 million of assembled workforce acquired in connection with the NetMaker
acquisition, which was consummated on March 30, 2001.  In accordance with SFAS
No. 142, the Company had six months from the initial date of adoption to
complete its transitional impairment test.  The Company has completed this test
and determined that no potential impairment existed.  During the six months
ended September 30, 2001, goodwill was adjusted by approximately $217,000 for
modifications to initial purchase accounting estimates.

  Acquired technology is being amortized on a straight-line basis over a period
of five years and amortization of acquired technology was $112,000 and $212,000
for the three and six months ended September 30, 2001, respectively.  We expect
amortization expense of approximately $470,000 in each of the fiscal years ended
March 31, 2002, 2003, 2004, 2005 and 2006, relating to the acquired technology.

 Information regarding the Company's goodwill and intangible assets is as
follows:

<TABLE>
<CAPTION>
                                                                    As of September 30, 2001
                                                            ---------------------------------------
                                                            Gross Carrying             Accumulated
                                                                Amount                 Amortization
                                                            --------------             ------------
                                                                          (in thousands)
<S>                                                         <C>                        <C>
Intangible assets subject to amortization:
    Acquired technology                                         $2,352                      $212
                                                                ======                      ====
Intangible assets not subject to amortization:
    Goodwill                                                     9,971
    Assembled workforce                                          1,018
                                                               -------
       Total                                                   $10,989
                                                               =======
</TABLE>

  Included in the above as components of investment in affiliate (see Note 8)
are the following: acquired technology of $352,000, accumulated amortization of
acquired technology of $12,000 and assembled workforce of $68,000.

  In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". SFAS 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. SFAS No. 143 is effective for fiscal years
beginning after June 15, 2002. The Company is in the process of evaluating the
impact of implementing SFAS No. 143.

  In August 2001, the Financial Accounting Standards Board issued SFAS No. 144,
"Accounting for the Impairment of Long-Lived Assets" which supersedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of" and the accounting and reporting provisions of APB No.
30, "Reporting the Results of Operations - Reporting and Effects of Disposal of
a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions," for the disposal of a segment of business.  This
Statement is effective for fiscal years beginning after December 15, 2001.  SFAS
No. 144 retains many of the provisions of SFAS No. 121, but addresses certain
implementation issues associated with that Statement.  The Company is currently
evaluating the impact of implementing SFAS No. 144.

                                       9
<PAGE>

  ITEM 2. Management's Discussion and Analysis of Financial Condition and
          Results of Operations

  The following discussion and analysis relates to the financial condition and
results of operations of the Company for the three and six months ended
September 30, 2001, and should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained in the Company's Annual Report on Form 10-K for the year ended March
31, 2001, filed with the SEC.

  This report contains forward-looking statements that involve substantial risks
and uncertainties. The statements contained in this report that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934.  You can identify these statements by forward-looking words such as
"anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan,"
"potential," "should," "will," and "would" or similar words. You should read
statements that contain these words carefully because they discuss our future
expectations, contain projections of our future results of operations or of our
financial position or state other forward-looking information. We believe that
it is important to communicate our future expectations to our investors.
However, there may be events in the future that we are not able to predict or
control accurately. The factors listed below in the section captioned "Certain
Factors That May Affect Future Results," as well as any cautionary language
contained herein, provide examples of risks, uncertainties, and events that may
cause our actual results to differ materially from the expectations we describe
in our forward-looking statements. Further, any forward-looking statement speaks
only as of the date on which such statement is made, and we undertake no
obligation to publicly update or revise any forward-looking information.

  Overview

  We provide intelligent network management software products and related
services. Our product suite consists of four primary software products: OPNET IT
Guru, OPNET Modeler, OPNET Netbiz, and our newest product, OPNET ServiceProvider
Guru (released in June 2001). We sell our OPNET suite of products to service
providers, including telecommunications carriers; ISPs and ASPs; large and
medium-sized enterprises; and network equipment manufacturers. We market our
product suite in North America primarily through a direct sales force and, to a
lesser extent, several resellers and original equipment manufacturers.
Internationally, we market our products primarily through our international
subsidiaries and third-party distributors.

  We sold our first products in 1987. Our operations, including acquisitions,
have been financed principally through cash provided by operations, a venture
financing in September 1997 and the proceeds of our initial public offering in
August 2000. In August 1998, we introduced our OPNET IT Guru and OPNET Netbiz
products.  In June 2001, we released OPNET ServiceProvider Guru and began a new
marketing and sales strategy to focus on this product.

  We generate revenues principally from licensing our software products and
providing related services, including maintenance and technical support,
consulting, and training.

  Our software license revenues consist of perpetual and term license sales of
our software products and royalty income. Software license revenues are
recognized upon delivery, provided that fees are fixed and determinable, no
significant modifications to the product are required, and collection of the
related receivable is probable. Where significant modifications are required,
software license revenues are recognized along with consulting fees on a
percentage-of-completion basis as the modifications are performed. We allow
customers to evaluate our software before purchase, and therefore it is our
policy not to allow returns.

  Our service revenues consist of fees from maintenance and technical support
agreements, consulting services, and training. The maintenance agreements
covering our products provide for technical support and periodic unspecified
product upgrades. Beginning in July 2001, our customers have been able to
separately purchase periodic unspecified product upgrades without purchasing
technical support.  Customers purchasing technical support will be required to
also purchase periodic unspecified product upgrades. Revenue related to periodic
unspecified product upgrades are now classified as software license revenue.
Revenue related to technical support will continue to be classified as service
revenue. Revenues for both technical support and periodic unspecified product
upgrades will continue to be deferred and recognized ratably over the support
period. The impact of this change on software license revenue was minimal for
the three months ended September 30, 2001. We offer consulting services
primarily to provide product customization and enhancements. Consulting services
are generally performed under fixed-price agreements and recognized as the work
is performed on a percentage-of-completion basis. We provide classroom and on-
site training to our customers on a daily fee basis.

                                       10
<PAGE>

  Software license revenues and service revenues for which payment has been
received, but that do not yet qualify for recognition as revenues, are reflected
as deferred revenues.

 Results of Operations

  The following table sets forth items from our statements of operations
expressed as a percentage of total revenues for the periods indicated:

<TABLE>
<CAPTION>
                                                 Three Months Ended                    Six Months Ended
                                                    September 30,                        September 30,
                                             -------------------------              ------------------------
                                              2001               2000               2001               2000
                                              -----              -----              -----              -----
<S>                                           <C>                <C>                <C>                <C>
Revenues:
  Software licenses                            58.4%              55.5%              58.5%              56.1%
  Services                                     41.6               44.5               41.5               43.9
                                              -----              -----              -----              -----
  Total revenues                              100.0              100.0              100.0              100.0
                                              -----              -----              -----              -----
Cost of revenues:
  Software licenses                             1.4                1.6                1.2                2.1
  Services                                     12.8               14.5               13.2               14.9
                                              -----              -----              -----              -----
  Total cost of revenues                       14.2               16.1               14.4               17.0
                                              -----              -----              -----              -----
Gross profit                                   85.8               83.9               85.6               83.0
                                              -----              -----              -----              -----
Operating expenses:
  Research and  development                    29.2               25.0               28.8               25.5
  Sales and  marketing                         36.8               42.3               37.1               42.3
  General and administrative                    9.7               10.2                9.3               10.2
  Amortization of acquired technology           1.0                  -                1.0                  -
                                              -----              -----              -----              -----
  Total operating expenses                     76.7               77.5               76.2               78.0
                                              -----              -----              -----              -----
Income from operations                          9.1                6.4                9.4                5.0
Interest and other income                       4.5                8.7                5.2                5.7
                                              -----              -----              -----              -----
Income before provision for income taxes       13.6               15.1               14.6               10.7
Provision for income taxes                      4.2                5.6                4.6                3.9
                                              -----              -----              -----              -----
Net income                                      9.4%               9.5%              10.0%               6.8%
                                              =====              =====              =====              =====
</TABLE>

  The following table sets forth, for each component of revenues, the cost of
these revenues as a percentage of the related revenues for the periods
indicated:

<TABLE>
<CAPTION>
                                                  Three Months Ended            Six Months Ended
                                                     September 30,                September 30,
                                                 -------------------         ----------------------
                                                  2001           2000           2001            2000
                                                 ----           ----           ----            ----
<S>                                              <C>           <C>            <C>            <C>
   Cost of software license revenues              2.4%           2.9%           2.1%            3.8%
   Cost of service revenues                      30.7           32.6           31.9            33.9
</TABLE>

                                       11
<PAGE>

Comparison of Three Months Ended September 30, 2001 and 2000

  Revenues

  Total revenues increased 45.1% to $11.3 million for the three months ended
September 30, 2001 from $7.8 million for the three months ended September 30,
2000. We believe that the percentage increase in our total revenues achieved in
this period is not necessarily indicative of future results.  Software license
revenues were 58.4% and 55.5% of total revenues for the three months ended
September 30, 2001 and 2000, respectively.

  Software License Revenues. Software license revenues increased 52.6% to $6.6
million for the three months ended September 30, 2001 from $4.3 million for the
three months ended September 30, 2000. The increase was primarily attributable
to the substantial growth in overall demand for our suite of products, revenue
contribution by our newest product, OPNET ServiceProvider Guru which was
released in June 2001, and revenue related to our broadening portfolio of
modules for OPNET IT Guru and OPNET Modeler products.  Additional contributors
to the growth in software license revenues include an increase in the average
transaction size, expansion of our marketing and direct sales force and the
continued growth of our international presence.

  Service Revenues. Service revenues increased 35.7% to $4.7 million for the
three months ended September 30, 2001 from $3.5 million for the three months
ended September 30, 2000. This growth in service revenues was primarily a result
of increased renewals of technical support contracts by our installed base of
customers, increased technical support contracts related to new license sales,
and growing demand for consulting services, primarily for the customization of
our OPNET Netbiz product.

  Cost of Revenues

  Cost of software license revenues consists primarily of royalties, media,
manuals, and distribution costs. Cost of service revenues consists primarily of
personnel-related costs in providing technical support, consulting, and training
to customers. Gross margin on software license revenues is substantially higher
than gross margin on service revenues, reflecting the low materials, packaging,
and other costs of software products compared with the relatively high personnel
costs associated with providing services. Cost of service revenues varies based
upon the relative mix of technical support, consulting, and training services.

  Cost of Software License Revenues. Cost of software license revenues increased
29.0% to $160,000 for the three months ended September 30, 2001 from $124,000
for the three months ended September 30, 2000. Gross margin on software license
revenues increased to 97.6% for the three months ended September 30, 2001 from
97.1% for the three months ended September 30, 2000. The increase in margin was
primarily due to a reduction in the level of sales requiring royalty payments
under our March 1999 agreement with Cadence Design Systems that required us to
pay a 50% royalty for specified sales of OPNET Modeler to the portion of
Cadence's customer base that uses an existing Cadence product. This agreement
ended on March 31, 2001.  We expect that gross margin on software license
revenues will decline slightly in future periods due to anticipated royalty
costs for new licensing arrangements entered into during the three months ended
September 30, 2001.

  Cost of Service Revenues. Cost of service revenues increased 27.8% to $1.4
million for the three months ended September 30, 2001 from $1.1 million for the
three months ended September 30, 2000. Gross margin on service revenues
increased to 69.3% for the three months ended September 30, 2001 from 67.4% for
the three months ended September 30, 2000. This improvement in margin is
primarily due to a higher level of profitability in consulting services, as well
as increased volume of maintenance services that provide higher gross margins
than consulting services.

  Operating Expenses

  Research and Development. Research and development expenses consist primarily
of salaries, related benefits, and other engineering-related costs. Research and
development expenses increased 69.5% to $3.3 million for the three months ended
September 30, 2001 from $1.9 million for the three months ended September 30,
2000. As a percentage of total revenues, research and development expenses
increased to 29.2% for the three months ended September 30, 2001 from 25.0% for
the three months ended September 30, 2000. These increases are primarily due to
increased staffing levels as result of the NetMaker acquisition in March 2001,
increased costs of research and development programs related to the development
of new products, including the release of OPNET ServiceProvider Guru in June
2001, and sustaining and upgrading our

                                       12
<PAGE>

existing products. We believe that a significant level of research and
development investment will be required to maintain our competitive advantage
and expect that the dollar amount of these expenditures will continue to grow in
future periods.

  Sales and Marketing. Sales and marketing expenses increased 26.6% to $4.2
million for the three months ended September 30, 2001 from $3.3 million for the
three months ended September 30, 2000. This increase was primarily due to a
substantial increase in the size of our direct sales force, increased
commissions associated with the growth in revenues, and an overall increase in
the level of advertising, tradeshow and other marketing activities.  As a
percentage of total revenues, sales and marketing expenses decreased to 36.8%
for the three months ended September 30, 2001 from 42.3% for the three months
ended September 30, 2000. This decrease as a percentage of total revenues
resulted from a proportionally smaller increase in costs associated with
developing market awareness for our newer products relative to the higher level
of revenues for the three months ended September 30, 2001.  We intend to
continue to expand our global sales and marketing infrastructure and,
accordingly, expect the dollar amount of our sales and marketing expenses to
increase in the future.

  General and Administrative. General and administrative expenses consist
primarily of salaries, related benefits, and fees for recruiting, legal,
accounting, and other services. General and administrative expenses increased
37.6% to $1.1 million for the three months ended September 30, 2001 from
$792,000 for the three months ended September 30, 2000. The increased level of
spending was primarily due to additional personnel costs and other expenses
associated with the expansion of our supporting infrastructure.  As a percentage
of total revenues, general and administrative expenses decreased to 9.7% for the
three months ended September 30, 2001 from 10.2% for the three months ended
September 30, 2000. We expect that the dollar amount of general and
administrative expenses will increase as we expand our operations.

  Amortization of Acquired Technology. In connection with the NetMaker
acquisition and our investment in WDM NetDesign, we recorded acquired technology
of $2.0 million and $352,000 respectively, which is being amortized on a
straight-line basis over a period of five years.  Amortization of acquired
technology for the three months ended September 30, 2001 was $112,000.

  Interest and Other Income

  Interest and other income decreased to $517,000 for the three months ended
September 30, 2001 from $677,000 for the three months ended September 30, 2000.
The decrease is primarily driven by a reduction in interest income earned on the
proceeds from our initial public offering due to the decline in interest rates
throughout the quarter, offset by fees associated with our $3.4 million letter
of credit outstanding at September 30, 2001.

  Provision for Income Taxes

  The provision for income taxes increased to $476,000 for the three months
ended September 30, 2001 from $435,000 for the three months ended September 30,
2000.  Our effective tax rate for the three months ended September 30, 2001 was
30.9% compared to 37.0% for the three months ended September 30, 2000.  This
increase in the provision and corresponding decrease in the effective tax rate
is primarily due to the growth in operating income partially offset by an
increased percentage of research and development tax credits available to us.

Comparison of Six Months Ended September 30, 2001 and 2000

  Revenues

  Total revenues increased 57.7% to $22.4 million for the six months ended
September 30, 2001 from $14.2 million for the six months ended September 30,
2000. Software license revenues were 58.5% and 56.1% of total revenues for the
six months ended September 30, 2001 and 2000, respectively.  As mentioned under
the comparison of quarterly results, we believe that the percentage increase in
our total revenues achieved this period is not necessarily indicative of future
results.

  Software License Revenues. Software license revenues increased 64.6% to $13.1
million for the six months ended September 30, 2001 from $8.0 million for the
six months ended September 30, 2000. The increase was primarily attributable to
the substantial growth in overall demand for our suite of products, including
our new OPNET ServiceProvider Guru product, and broadening portfolio of related
models and modules, increase in the average transaction size, expansion of our
marketing and direct sales force and the continued growth of our international
presence.

                                       13
<PAGE>

  Service Revenues. Service revenues increased 48.9% to $9.3 million for the six
months ended September 30, 2001 from $6.2 million for the six months ended
September 30, 2000. This growth in service revenues was primarily a result of
increased renewals of technical support contracts by our installed base of
customers, increased technical support contracts related to new license sales,
and growing demand for consulting services, primarily for the customization of
our OPNET Netbiz product.

  Cost of Revenues

  Cost of Software License Revenues. Cost of software license revenues decreased
10.3% to $270,000 for the six months ended September 30, 2001 from $301,000 for
the six months ended September 30, 2000. Gross margin on software license
revenues increased to 97.9% for the six months ended September 30, 2001 from
96.2% for the six months ended September 30, 2000. The decrease in costs of
software license revenues and the related increase in margin was primarily due
to a reduction in the level of sales requiring royalty payments under our March
1999 agreement with Cadence Design Systems which ended on March 31, 2001.

  Cost of Service Revenues. Cost of service revenues increased 40.0% to $3.0
million for the six months ended September 30, 2001 from $2.1 million for the
six months ended September 30, 2000. Gross margin on service revenues increased
to 68.1% for the six months ended September 30, 2001 from 66.1% for the six
months ended September 30, 2000. This improvement in margin is primarily due to
a higher level of profitability in consulting services, as well as increased
volume of maintenance services that provide higher gross margins than consulting
services.

  Operating Expenses

  Research and Development. Research and development expenses increased 77.8% to
$6.5 million for the six months ended September 30, 2001 from $3.6 million for
the six months ended September 30, 2000. As a percentage of total revenues,
research and development expenses increased to 28.8% for the six months ended
September 30, 2001 from 25.5% for the six months ended September 30, 2000. The
increase as a percentage of total revenues is primarily due to increased
staffing levels as result of the NetMaker acquisition in March 2001, increased
costs of research and development programs related to the development of new
products, and sustaining and upgrading our existing products.

  Sales and Marketing. Sales and marketing expenses increased 38.8% to $8.3
million for the six months ended September 30, 2001 from $6.0 million for the
six months ended September 30, 2000. This increase was primarily due to a
substantial increase in the size of our direct sales force, increased
commissions associated with the growth in revenues, and an overall increase in
our sales and marketing efforts.  As a percentage of total revenues, sales and
marketing expenses decreased to 37.1% for the six months ended September 30,
2001 from 42.3% for the six months ended September 30, 2000.

  General and Administrative. General and administrative expenses increased
42.9% to $2.1 million for the six months ended September 30, 2001 from $1.5
million for the six months ended September 30, 2000. The increased level of
spending was primarily due to additional personnel costs and other expenses
associated with the expansion of our supporting infrastructure.  As a percentage
of total revenues, general and administrative expenses decreased to 9.3% for the
six months ended September 30, 2001 from 10.2% for the six months ended
September 30, 2000.

  Amortization of Acquired Technology. In connection with the NetMaker
acquisition and our investment in WDM NetDesign, we recorded acquired technology
of $2.0 million and $352,000 respectively, which is being amortized on a
straight-line basis over a period of five years.  Amortization of acquired
technology for the six months ended September 30, 2001 was $212,000.

  Interest and Other Income

  Interest and other income increased to $1.2 million for the six months ended
September 30, 2001 from $813,000 for the six months ended September 30, 2000.
The increase was primarily due to a full six months of interest income earned on
the proceeds from our initial public offering for the period ended September 30,
2001, compared to only two months of interest income earned for the comparable
period in the prior year as the initial public offering was completed in August
2000.  This increase was offset by a decline in interest rates for the six
months ended September 30, 2001.


                                       14
<PAGE>
  Provision for Income Taxes

  The provision for income taxes increased to $1.0 million for the six months
ended September 30, 2001 from $560,000 for the six months ended September 30,
2000.  Our effective tax rate for the six months ended September 30, 2001 was
31.8% compared to 36.7% for the six months ended September 30, 2000.  This
increase in the provision and corresponding decrease in the effective tax rate
is primarily due to the growth in operating income partially offset by an
increased percentage of research and development tax credits available to us.

  Liquidity and Capital Resources

  Since inception, we have funded our operations primarily through cash provided
by operating activities. In September 1997, we raised $7.0 million in venture
financing, of which we used $3.4 million to repurchase stock from our existing
stockholders.  In August 2000, we completed our initial public offering in which
we raised approximately $54.1 million, net of underwriting discounts and
commissions and estimated offering expenses paid by us.  As of September 30,
2001, we had cash and cash equivalents totaling $59.3 million.

  Cash used in operating activities was $30,000 for the six months ended
September 30, 2001. Cash used in operating activities is primarily derived from
net income, as adjusted for depreciation and amortization offset by increased
accounts receivable and accrued liability balances as a result of the growth in
our business.  Cash used in investing activities was $3.8 million for the six
months ended September 30, 2001. The funds were used primarily to purchase
property and equipment for our new corporate headquarters in Bethesda, Maryland,
to pay the costs incurred for the NetMaker acquisition and to pay for our
investment in WDM NetDesign.  Cash provided by financing activities was $494,000
for the six months ended September 30, 2001, reflecting the proceeds received
from the exercise of stock options and the sale of common stock under our 2000
Employee Stock Purchase Plan.

  We have a $5.0 million revolving line of credit with a commercial bank, which
expires in June 2002. Borrowings under this line of credit bear interest an
annual rate equal to LIBOR plus 2% to 2.5%. We have currently used $3.4 million
of this facility for a letter of credit that secures the lease for our new
headquarters in Bethesda, Maryland.

  We expect to experience growth in our working capital needs for the
foreseeable future as we execute our business plan. We anticipate that operating
activities, as well as planned capital expenditures, will constitute a material
use of our cash resources. We may utilize cash resources to further expand our
new headquarters facility or to fund acquisitions or investments in
complementary businesses, technologies, or products.

  We believe that our current cash and cash equivalents and cash generated from
operations, along with available borrowings under our line of credit, will be
sufficient to meet our anticipated cash requirements for working capital and
capital expenditures for at least the next 12 months.

  Certain Factors That May Affect Future Results

  The following important factors, among others, could cause actual results to
differ materially from those indicated by forward-looking statements made in
this Quarterly Report on Form 10-Q and presented elsewhere by management from
time to time.

  Our operating results may fluctuate significantly as a result of factors
outside of our control, which could cause the market price of our stock to
decline

  Our operating results have fluctuated in the past, and are likely to fluctuate
significantly in the future. Our financial results may as a consequence fall
short of the expectations of public market analysts or investors, which could
cause the price of our common stock to decline. Our revenues and operating
results may vary significantly from quarter to quarter due to a number of
factors, many of which are beyond our control. Factors that could affect our
operating results include:

        -   the timing of large orders;

        -  changes in the mix of our sales, including the mix between higher
           margin software products and somewhat lower margin services and
           maintenance, and the proportion of our license sales requiring us to
           make royalty payments;

        -  the timing and amount of our marketing, sales, and product
           development expenses;


                                       15
<PAGE>

        -  the cost and time required to develop new software products;

        -  the introduction, timing, and market acceptance of new products
           introduced by us or our competitors;

        -  changes in network technology or in applications, which could
           require us to modify our products or develop new products;

        -  general economic conditions, which can affect our customers'
           purchasing decisions and the length of our sales cycle;

        -  changes in our pricing policies or those of our competitors; and

        -  the timing and size of potential acquisitions by us.

  We expect to make significant expenditures in all areas of our business,
particularly sales and marketing operations, in order to promote future growth.
Because the expenses associated with these activities are relatively fixed in
the short term, we may be unable to adjust spending quickly enough to offset any
unexpected shortfall in revenue growth or any decrease in revenue levels. In
addition, our revenues in any quarter depend substantially on orders we receive
and ship in that quarter. We typically receive a significant portion of orders
in any quarter during the last month of the quarter, and we cannot predict
whether those orders will be placed and shipped in that period. If we have lower
revenues than we expect, we probably will not be able to reduce our operating
expenses quickly in response. Therefore, any significant shortfall in revenues
or delay of customer orders could have an immediate adverse effect on our
operating results in that quarter.

  For all of these reasons, quarterly comparisons of our financial results are
not necessarily meaningful and you should not rely on them as an indication of
our future performance.

  The market for intelligent network management software is new and evolving,
and if this market does not develop as anticipated, our revenues could decline

  We derive all of our revenues from the sale of products and services that are
designed to allow our customers to manage the performance of networks and
applications. Accordingly, if the market for intelligent network management
software does not continue to grow, we could face declining revenues, which
could ultimately lead to our becoming unprofitable. The market for intelligent
network management software solutions is in an early stage of development.
Therefore, we cannot accurately assess the size of the market and may be unable
to identify an effective distribution strategy, the competitive environment that
will develop, and the appropriate features and prices for products to address
the market. If we are to be successful, our current and potential customers must
recognize the value of intelligent network management software solutions, decide
to invest in the management of their networks, and, in particular, adopt and
continue to use our software solutions.

  We may not be able to grow our business if service providers do not buy our
products

  A key element of our strategy is to increase sales to service providers, and
our future performance will be significantly dependent upon increased adoption
by service providers of our software products, including OPNET ServiceProvider
Guru. Accordingly, the failure of our products to perform favorably in the
service provider environment or to gain wider adoption by service providers
could have a negative effect on our business and future operating results.

  If our newest products, OPNET IT Guru, OPNET Netbiz and OPNET ServiceProvider
Guru, do not gain widespread market acceptance, our revenues might not increase
and could even decline

  We expect to derive a substantial portion of our revenues in the future from
OPNET IT Guru and OPNET Netbiz, both of which were released in August 1998, and
OPNET ServiceProvider Guru, which was released in June 2001. Our business
depends on customer acceptance of these products and our revenues may not
increase, or may decline, if our target customers do not adopt and expand their
use of OPNET IT Guru, OPNET Netbiz and OPNET ServiceProvider Guru.  To date, we
have not achieved widespread market acceptance of either OPNET IT Guru or OPNET
Netbiz, and we have only recently begun shipping OPNET ServiceProvider Guru.  In
addition, if our OPNET Modeler product, which we have been

                                       16
<PAGE>

selling since 1987, encounters declining sales, which could occur for a variety
of reasons, including market saturation, and sales of our newer products do not
grow at a rate sufficient to offset the shortfall, our revenues would decline.

  If we do not successfully expand our sales force, we may be unable to increase
our sales

  We sell our products primarily through our direct sales force, and we must
expand the size of our sales force to increase revenues. If we are unable to
hire or retain qualified sales personnel, if newly hired personnel fail to
develop the necessary skills to be productive, or if they reach productivity
more slowly than anticipated, our ability to increase our revenues and grow our
business could be compromised. Our sales people require a long period of time to
become productive, typically three to six months. The time required to reach
productivity, as well as the challenge of attracting, training, and retaining
qualified candidates, may make it difficult to meet our sales force growth
targets. Further, we may not generate sufficient sales to offset the increased
expense resulting from growing our sales force or we may be unable to manage a
larger sales force.

  Our ability to increase our sales will be impaired if we do not expand and
manage our indirect distribution channels

  To increase our sales, we must, among other things, further expand and manage
our indirect distribution channels, which consist primarily of international
distributors and original equipment manufacturers and resellers. If we are
unable to expand and manage our relationships with our distributors, our
distributors are unable or unwilling to effectively market and sell our
products, or we lose existing distributor relationships, we might not be able to
increase our revenues. Our international distributors and original equipment
manufacturers and resellers have no obligation to market or purchase our
products. In addition, they could partner with our competitors, bundle or resell
competitors' products, or internally develop products that compete with our
products.

  We may not be able to successfully manage our expanding operations, which
could impair our ability to operate profitably

  We may be unable to operate our business profitably if we fail to manage our
growth. Our rapid growth has sometimes strained, and may in the future continue
to strain, our managerial, administrative, operational, and financial resources
and controls. We plan to continue to expand our operations and increase the
number of our full-time employees. Our ability to manage growth will depend in
part on our ability to continue to enhance our operating, financial, and
management information systems. Our personnel, systems, and controls may not be
adequate to support our growth. In addition, our revenues may not continue to
grow at a sufficient rate to absorb the costs associated with a larger overall
employee base.

  If we are unable to introduce new and enhanced products on a timely basis that
respond effectively to changing technology, our revenues may decline

  Our market is characterized by rapid technological change, changes in customer
requirements, frequent new product and service introductions and enhancements,
and evolving industry standards. If we fail to develop and introduce new and
enhanced products on a timely basis that respond to these changes, our products
could become obsolete, demand for our products could decline and our revenues
could fall. Advances in network management technology, software engineering,
simulation technology, or the emergence of new industry standards, could lead to
new competitive products that have better performance, more features, or lower
prices than our products and could render our products unmarketable. In
addition, the introduction and adoption of future network technologies or
application architectures could reduce or eliminate the need for predictive
network management software.

  If we fail to retain our key personnel and attract and retain additional
qualified personnel, we might not be able to sustain our revenue growth

  Our future success and our ability to sustain our revenue growth depend upon
the continued service of our executive officers and other key sales and research
and development personnel. The loss of any of our key employees, in particular
Marc A. Cohen, our chairman of the board and chief executive officer, and Alain
J. Cohen, our president and chief technology officer, could adversely affect our
ability to pursue our growth strategy. We do not have employment agreements or
any other agreements that obligate any of our officers or key employees to
remain with us.

  We must also continue to hire large numbers of highly qualified individuals,
particularly software engineers and sales and marketing personnel. Our failure
to attract and retain technical personnel for our product development,
consulting

                                       17
<PAGE>

services, and technical support teams may limit our ability to develop new
products or product enhancements. Competition for these individuals is intense,
and we may not be able to attract and retain additional highly qualified
personnel in the future. In addition, limitations imposed by federal immigration
laws and the availability of visas could impair our ability to recruit and
employ skilled technical professionals from other countries to work in the
United States.

  Our international operations subject our business to additional risks, which
could cause our sales or profitability to decline

  We plan to continue to increase our international sales activities, but these
plans are subject to a number of risks that could cause our sales to decline or
could otherwise cause a decline in profitability. These risks include:

        -  greater difficulty in accounts receivable collection and longer
           collection periods;

        -  political and economic instability;

        -  difficulty in attracting distributors that will market and support
           our products effectively;

        -  the need to comply with varying employment policies and
           regulations that could make it more difficult and expensive to
           manage our employees if we need to establish more direct sales
           or support staff outside the United States;

        -  potentially adverse tax consequences; and

        -  the effects of currency fluctuations.

  Expanding our OPNET Netbiz consulting services business will be costly and may
not result in any compensating increase in sales or profitability

  We have been aggressively expanding our consulting services delivered in
conjunction with sales of OPNET Netbiz. The significant additional expenditures
and operational resources required to expand our OPNET Netbiz consulting
services business will place additional strain on our management, financial, and
operational resources and may make it more difficult for us to maintain
profitability. If OPNET Netbiz does not achieve significant market acceptance,
our customers will not engage our consulting services organization to assist
with consulting, custom development, implementation support, and training for
OPNET Netbiz. In addition, we may be unable to attract or retain a sufficient
number of the highly qualified consulting services personnel that we expect the
expansion of our consulting services business will require.

  We face intense competition, which could cause us to lose sales, resulting in
lower revenues and profitability

  The intense and increasing competition in our market could cause us to lose
sales, which could result in lower revenues and could cause us to become
unprofitable. The market for intelligent network management software is evolving
rapidly and is highly competitive. We believe that this market is likely to
become more competitive as the demand for intelligent network management
solutions continues to increase. Many of our current and potential competitors
are larger and have substantially greater financial and technical resources than
we do. In addition, it is possible that other vendors as well as some of our
customers or distributors will develop and market solutions that compete with
our products in the future.

  OPNET Modeler, OPNET IT Guru, and OPNET ServiceProvider Guru currently face or
potentially will face competition from several sources, including:

        -  software vendors with intelligent network management offerings and
           application performance diagnosis solutions, such as Compuware;

        -  consultants who offer intelligent network management advisory
           services; and

        -  customers who develop their own intelligent network management
           capabilities, either internally or through outsourcing.

  OPNET Netbiz competes with solutions designed to facilitate and automate sales
processes in general.

                                       18
<PAGE>

  If the Internet infrastructure does not grow as currently anticipated, sales
of our OPNET Netbiz product may not grow and our revenues may decline

  Our OPNET Netbiz product addresses a new and emerging market for sales process
automation, including over the Internet, by service providers and network
equipment manufacturers. The failure of this market to develop, or a delay in
the development of this market, would reduce demand for OPNET Netbiz and cause
our revenues to decline. The success of OPNET Netbiz depends substantially upon
the widespread adoption of the Internet as a primary medium for commerce and
business applications. Moreover, critical issues concerning the commercial use
of the Internet, such as security, reliability, cost, accessibility, and quality
of service, remain unresolved and may negatively affect the growth of Internet
use or the attractiveness of commerce and business communication over the
Internet.

  Potential errors in our products and our inability to correct those errors
could harm our reputation and could cause our customers to demand refunds from
us or assert claims for damages against us

 Our software products could contain significant errors or bugs that may result
in:

        -   the loss of or delay in market acceptance and sales of our products;

        -  the delay in introduction of new products;

        -  diversion of our resources;

        -  injury to our reputation; and

        -  increased support costs.

  Bugs may be discovered at any point in a product's life cycle. We expect that
errors in our products will be found in the future, particularly in new product
offerings and new releases of our current products.

  Because our customers use our products to manage networks that are critical to
their business operations, any failure of our products could expose us to
product liability claims. In addition, errors in our products could cause our
customers' networks and systems to fail or compromise their data, which could
also result in liability to us. Product liability claims brought against us
could divert the attention of management and key personnel, could be expensive
to defend, and may result in adverse settlements and judgments.

  Our software products rely on our intellectual property, and any failure to
protect our intellectual property could enable our competitors to market
products with similar features that may reduce our revenues by decreasing demand
for our products, and could allow the use of our products by users who have not
paid the required license fee

  If we are unable to protect our intellectual property, our competitors could
use our intellectual property to market products similar to our products, which
could reduce our revenues by decreasing demand for our products. In addition, we
may be unable to prevent the use of our products by persons who have not paid
the required license fee, which could reduce our revenues. Our success and
ability to compete depend substantially upon the internally developed technology
that is incorporated in our products. Policing unauthorized use of our products
is difficult, and we may not be able to prevent misappropriation of our
technology, particularly in foreign countries where the laws may not protect our
proprietary rights as fully as those in the United States. Others may circumvent
the patents, copyrights, and trade secrets we own. In the ordinary course of
business, we enter into a combination of confidentiality, non-competition, and
non-disclosure agreements with our employees. These measures afford only limited
protection and may be inadequate, especially because our employees are highly
sought after and may leave our employ with significant knowledge of our
proprietary information. In addition, any confidentiality, non-competition, and
non-disclosure agreements we enter into may be found to be unenforceable, or our
copy protection mechanisms embedded in our software products could fail or could
be circumvented.

  Our products employ technology that may infringe on the proprietary rights of
others, and, as a result, we could become liable for significant damages

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<PAGE>

  We expect that our software products may be increasingly subject to third-
party infringement claims as the number of competitors in our industry segment
grows and the functionalities of products in different industry segments
overlap. Regardless of whether these claims have any merit, they could:

        -   be time-consuming to defend;

        -  result in costly litigation;

        -  divert our management's attention and resources;

        -  cause us to cease or delay product shipments; or

        -  require us to enter into royalty or licensing agreements.

  These royalty or licensing agreements may not be available on terms acceptable
to us, if at all. A successful claim of product infringement against us or our
failure or inability to license the infringed or similar technology could
adversely affect our business because we would not be able to sell the affected
product without redeveloping it or incurring significant additional expense.

  If we undertake acquisitions, they may be expensive and disruptive to our
business and could cause the market price of our common stock to decline

  In March 2001, we completed the NetMaker acquisition and in August 2001 we
acquired a 20% interest in WDM NetDesign.  We may continue to acquire or make
investments in companies, products, or technologies if opportunities arise. Any
acquisitions could be expensive, disrupt our ongoing business, distract our
management and employees, and adversely affect our financial results and the
market price of our common stock. We may not be able to identify suitable
acquisition or investment candidates, and if we do identify suitable candidates,
we may not be able to make these acquisitions or investments on commercially
acceptable terms or at all. If we make an acquisition, we could have difficulty
integrating the acquired technology, employees, or operations. In addition, the
key personnel of the acquired company may decide not to work for us. We also
expect that we would incur substantial expenses if we acquired other businesses
or technologies. We might use cash on hand, incur debt, or issue equity
securities to pay for any future acquisitions. If we issue additional equity
securities, our stockholders could experience dilution and the market price of
our stock may decline.

  Our products are subject to changing computing environments, including
operating system software and hardware platforms, which could render our
products obsolete

  The evolution of existing computing environments and the introduction of new
popular computing environments may require us to redesign our products or
develop new products. Computing environments, including operating system
software and hardware platforms, are complex and change rapidly. Our products
are designed to operate in currently popular computing environments. Due to the
long development and testing periods required to adapt our products to new or
modified computing environments, we could experience significant delays in
product releases or shipments, which could result in lost revenues and
significant additional expense.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  We consider all highly liquid investments purchased with a maturity of three
months or less to be cash equivalents, and those with maturities greater than
three months are considered to be marketable securities. Cash equivalents and
marketable securities are stated at amortized cost plus accrued interest, which
approximates fair value. Cash equivalents and marketable securities consist
primarily of money instruments and U.S. Treasury bills. We currently do not
hedge interest rate exposure, but do not believe that an increase in interest
rates would have a material effect on the value of our marketable securities.

                                       20
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

  None.

ITEM 2. Changes in Securities and Use of Proceeds

  On August 7, 2000, the Company closed an initial public offering of its Common
Stock (the "Offering").  The shares of Common Stock sold in the Offering were
registered under the Securities Act on a Registration Statement on Form S-1 (No.
333-32588) (the "Registration Statement") that was declared effective by the
Securities and Exchange Commission on August 1, 2000, and the Offering commenced
on that date.

  After deducting the underwriting discounts and commissions and the estimated
Offering expenses, the net proceeds to the Company from the Offering were
approximately $54.1 million.

  The Company intends to use the net proceeds of the Offering for general
corporate purposes, including working capital and capital expenditures.  From
the date of the Offering through September 30, 2001, the Company used
approximately $4.8 million of the net proceeds for capital expenditures and
leasehold improvements related to its new headquarters facility in Bethesda,
Maryland.  The Company also used approximately $6.2 million of the net proceeds
for the NetMaker acquisition and acquisition-related expenses, and $461,000 for
the investment in WDM NetDesign.  The Company has not allocated any of the
remaining net proceeds to any identifiable uses. The Company may also use a
portion of the net proceeds to acquire businesses, products, or technologies
that are complementary to its business. Pending their use, the Company invests
the net proceeds in investment grade, interest-bearing securities. None of these
amounts were paid directly or indirectly to any director, officer, general
partners of the Company or their associates, persons owning 10% or more of any
class of equity securities of the Company, or any affiliate of the Company.

ITEM 3. Defaults Upon Senior Securities

 None.

ITEM 4. Submission of Matters to a Vote of Security Holders

  At the Annual Meeting of Stockholders of the Company held on September 11,
2001, (i) the Company's nominee for Class I Director for the ensuing three years
was elected, (ii) the amendment and restatement of the Company's 2000 Stock
Incentive Plan and the continuance of the Company's 2000 Stock Incentive Plan,
as amended and restated, were approved and (iii) the selection of Deloitte &
Touche LLP as the Company's independent auditors for the current fiscal year was
ratified.

  With respect to the election of the Class I Director, the voting was as
follows:

             Nominee            For             Withheld

             Bruce R. Evans     15,782,727      353,603

  With respect to the approval of the amendment and restatement of the Company's
2000 Stock Incentive Plan and the approval of the continuance of the Company's
2000 Stock Incentive Plan, as amended and restated, the voting was as follows:

             For                10,965,651

             Against             4,170,528

             Abstain                11,127

                                       21
<PAGE>

  With respect to the ratification of the selection of Deloitte & Touche LLP as
the Company's independent auditors for the current fiscal year, the voting was
as follows:

             For                15,691,156

             Against               440,117

             Abstain                 5,057


ITEM 5. Other Information

  None.

ITEM 6. Exhibits and Reports on Form 8-K

  A. Exhibits:  See Exhibit Index

  B. Reports on Form 8-K

        None.

                                       22
<PAGE>

                                   SIGNATURES

  Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         OPNET TECHNOLOGIES, INC.
                                         (Registrant)

                                         By: /s/ Marc A. Cohen
                                             -----------------
                                             Name: Marc A. Cohen
                                             Title:  Chairman and
                                                     Chief Executive Officer
                                                     (Principal Financial and
                                                     Accounting Officer)

Date: November 14, 2001

                                       23
<PAGE>

                            OPNET Technologies, Inc.
                                 EXHIBIT INDEX

Exhibit
 Number             Description

  10.1              Amended and Restated 2000 Stock Incentive Plan

                                       24